According to Balisacan, notwithstanding the successive natural disasters that struck Central and Southern Luzon last year, the country remained one of the best performing economies in the Asian region, second only to China, which grew by 7.7 percent. Balisacan claimed this was the country’s fastest growth since President Benigno Aquino 3rd came to power in 2010.

What’s quite suspicious though is that, despite this “remarkable” economic growth touted by the Aquino administration, average Filipinos have not experienced a commensurate improvement in their economic situation.

In fact, one in two Filipinos now say the national economy has worsened in the past year.

“Half of the Filipino population (50 percent) consider the state of the Philippine economy as having worsened over the last 12 months,” Pulse Asia reported in last month’s Survey on Quality of Life and State of the National Economy.

The Pulse Asia survey also showed that almost half of the Filipino population (43 percent) believe their personal quality of life has deteriorated in the last 12 months, with about the same number (45 percent) saying that they expect no change in their personal circumstances this year.

The pessimistic outlook of many Filipinos shouldn’t come as a surprise to the Aquino administration.

While the country may have racked up an impressive rate of economic growth, poverty rates remain virtually unchanged since 2006.

Based on the latest poverty data from the National Statistical Coordination Board (NSCB), the recorded poverty incidence for the first half of 2012 was 27.9 percent, slightly less than the 28.8 percent recorded in the first half of 2006, and 28.6 percent in the first half of 2009 and 2011.

The stagnant poverty rates seem to indicate that the purported economic boom has only benefited a tiny minority of Philippine society: the few elite families or groups that monopolize huge sectors of the Philippine industry such as banking, telecommunications, energy, water supply, toll roads and property development.

Today, these industries remain effective oligarchies or cartels that have impeded the growth and development of job-generating and poverty-alleviating small and medium enterprises (SMEs).

According to a paper released by the Philippine Institute for Development Studies, SMEs account for about 99 percent of total firms in the country. Yet, these SMEs account for only 35 percent of our GDP. In contrast, SMEs in Japan and Korea account for roughly half of their total GDP. Moreover, 61 percent of employment in the Philippines is generated by SMEs. Their counterparts in Japan and Korea account for 70 to 85 percent of employment.

This low GDP output and employment ratio of local SMEs can only mean that there are fewer jobs and even fewer good-paying jobs for most Filipinos, which exacerbates the poverty incidence across the country.

This also means that much of the recent economic expansion has been limited—Aquino administration officials admit—to a few industries like retail trade, real estate, BPO and the stock market, which do not provide enough stable and quality employment for the majority of the workforce.

According to the Asian Development Bank Outlook (ADO) report last October 2013, more than 25 percent of Filipino workers (or one in every four) are unemployed or underemployed, with 40 percent of the workforce (or almost half of Filipino workers) categorized as vulnerable— unpaid family workers and the self-employed, mostly in the informal economy.

Blame this on the Aquino government’s flawed economic model, which has continued to depend on domestic consumption, strong remittances from overseas workers and the business process outsourcing industry, which are filled mostly by college graduates.

Perhaps, our economic managers should learn a lesson or two from China, the world’s largest economy.

Last November, Chinese Premier Li Keqiang laid the standard on how China’s economic growth should translate into job creation. While in the past, one percentage point of GDP growth created about one million new employment opportunities, Li says that today the same gain in China should create from 1.3 to 1.5 million new jobs. So with its 7.7 percent GDP growth, China will create some 11 million new jobs annually.

The Philippines, on the other hand, with its purported 7.2 percent GDP growth, managed to create only around 700,000 new jobs last year.

Why? Because our country’s economic managers seem more concerned about propping up the Aquino administration’s public image with instantaneous and superficial gains such as the investment grade euphoria rather than the more structural economic changes that will bring about real inclusive growth for a vast number of unemployed and underemployed Filipinos.

7 Comments

It’s all about window dressing. The administration is on its way to lay exclusive claim that the economy grew the fastest during its tenure, And why won’t they? They have the “numbers” to prove it.

There is no denying that commercial centers sprout like mushrooms particularly in Metro Manila. I have lost count of the number of condominiums being built simultaneously in several urban areas. But that’s hardly the measure of economic success is it? With only the moneyed and the influential getting the biggest share of these economic activities and the remaining scraps left for everybody else to partake. And so the “growth” we’re experiencing is hardly inclusive. Hence, the glacial pace of improvement in our poverty levels.

Perhaps this administration and all succeeding ones should use these measures instead: If our GDP grows at 7.2%, maybe we should expect that poverty levels, hunger and crime incidence be reduced by the same or faster rate than that. And jobs created and needed infrastructure (roads, bridges, ports, airports, etc.) built would also grow by the same or faster rate than that. Then maybe, all these talk about glowing economic performance will start to become more believable.

Lies, lies and nothing but lies. Even after his term, P-noy d’ Turd will keep on believing the lies they wove years before. In fact, even if behind bars in a mental asylum, P-noy will always be convinced that he was the most outstanding president the country ever had.

Yes, I was surprised by the 7.2% GDP as well but come to think of it, have you noticed the people coming to Divisoria, Baclaran and the malls? These places are teeming with shoppers and non-shoppers alike even before October of last year. Consumers money really must be fueling our economy.

I am but an ordinary citizen who cannot fully understand how GDP growth can equate to employment increase etc. but I think I can grasp a few things like:

1. The country’s positive current account is mainly due to remittances of our millions of OFWs abroad and the BPO industry which is on a dramatic rise. I don’t think this administration can claim credit for these since we had OFWs long before Aquino came into power and their remitances are spurred by their love and concern for their relatives here and not because of any enducement by this or any other administration and the BPO industry has flourished here due to a demand worldwide and the Filipino’s innate talents in speaking and not due to any promotion by this government.

2. I see a robust flurry of highrise building construction everywhere within metropolitan Manila and logically this should mean employment for many but why is there a persistent complaint of high unemployment. What kind of labor force are we talking about here. Certainly if it is the farmers and rural folks we mean then indeed no amount of GDP growth will trickle down to them since it is the service and manufacturing
sectors that account for much of the growth in the economy.

3. I read somewhere that we are lagging behind our neighbors in Asia in terms of attracting foreign investments due to our restrctive constitution. This is not new to me since sometime ago there have been clamors for revising the constitution to open us up to investors but why do these not prosper we might wonder. Is it because our local oligarchs will not tolerate competition and will want to hold this country exclusively for and by themselves? I believe so.

All these claims by NEDA and other agencies of the government about our galloping economic progress are suspect to me since, as I said, I just do not understand what they mean.

25% of Filipinos unemployed or underemployed. Poverty on the rise commensurate with increase in crime. Abnoy is proud to enrich big business and KKK, but cannot care s_ _t about the common man. That is the sorry state of the Phl under the PR blitz “daang matuwid”.

That is a very nice analysis from Mr. Dulay. The president and his economic managers must read this column and start reviewing their economic policies just for the sake of his bosses. If not, then, the president is just riding on his high popularity rating until he finish his term leaving his poor bosses unsatisfied and disappointed while his favored friends in the rich elite circle or the greedy oligarchs are laughing all the way to their banks as usual. Are our gov officials not ashamed to their counterparts in other economically successful countries whenever they meet in any international summit? Siguro pakapalan na lang ng mukha.

7.2% GDP? From what statistical magic these numbers are being derived? Strings being pulled from unseen puppeteers working on their programmed abacus? Second in Asia behind China, so they proclaim through out the holy land of Thieves! Gross Domestic Product that is, or is it GREED, DIRTY POLITICS stats….oh, my god, this is Gross!!!